Opportunities and Challenges: Mapping the Future

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Opportunities and Challenges Mapping the Future

• Joseph W. Thompson, MD, MPH
• Surgeon General State of Arkansas
• Director Arkansas Center for Health
  Improvement

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Arkansas Center for Health Improvement

• Mission
• Improving health through evidence-based health
  policy research, program development, and public
  issue advocacy
• Core Values
• Initiative, Trust, Commitment, and Innovation

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ACHIs Scope of Work
ACHI Scope of Work
Health Policy System Integration
Health Promotion Disease Prevention
Health Care Finance
Access to Needed Quality Care
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ACHIs Major Initiatives

• Tobacco Settlement Proceeds Act
• All tobacco settlement funds for health
• Optimization for Arkansas Medicaid
• Improved efficiency and coverage
• Arkansas Health Insurance Roundtable Plan
• Statewide strategic plan
• Reduction in uninsured children 20 10
• Safety-benefit program
• Child and Adolescent Obesity Initiative
• Arkansas Health Data Initiative
• Arkansas Southern Rural Access Program
• First Arkansas Surgeon General

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Challenges and Opportunities

• Hurricanes and pandemics (and earthquakes)
• Globalization of our economy
• National security threats and responses
• 46 million uninsured U.S. citizens
• Medical and information technology advances
• Aging population and deteriorating health
• Investment strategies at the federal, state,
  local, and personal levels

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Healthcare Financing in Transition

• 1910 Flexner Report Medical education
• 1928 Penicillin discovered
• 1944 first patient treated
• 1941 WWII Wage controls / Employers response
• 1957 Hill Burton Act stimulates hospitals
• 1965 Medicare / Medicaid established
• 1973 Federal HMO Act
• 1990s Employer / Medicaid HMO expansions
• 1997 State Childrens Health Insurance Program
• 2003 Medicare Modernization Act

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Where are we??

• Employer sponsored care remains primary financing
  strategy in most states
• Children growing responsibility of public sector
• Proportion of uninsured continues to increase
  (46 million U.S. citizens)
• Healthcare costs (public and private) continue to
  exceed other growth areas
• Uncompensated care shifted to insured
• Safety net providers fragmented
• Medicaid / Medicare cost-containment questionable
• Private sector modifying benefits

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Increases in health insurance premiums compared
with other indicators 19882005
Source Kaiser/HRET Survey of Employer-Sponsored
Health Benefits 19992005 KPMG Survey of
Employer-Sponsored Health Benefits 1993, 1996
The Health Insurance Association of America
(HIAA) 1988, 1989, 1990 Bureau of Labor
Statistics, Consumer Price Index, U.S. City
Average of Annual Inflation (April to April),
19882005 Bureau of Labor Statistics, Seasonally
Adjusted Data from the Current Employment
Statistics Survey (April to April), 19882005.
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Increases in health insurance premiums compared
with other indicators 19882005
Source Kaiser/HRET Survey of Employer-Sponsored
Health Benefits 19992005 KPMG Survey of
Employer-Sponsored Health Benefits 1993, 1996
The Health Insurance Association of America
(HIAA) 1988, 1989, 1990 Bureau of Labor
Statistics, Consumer Price Index, U.S. City
Average of Annual Inflation (April to April),
19882005 Bureau of Labor Statistics, Seasonally
Adjusted Data from the Current Employment
Statistics Survey (April to April), 19882005.
State budget information, National Association of
State Budget Officers, Fiscal Survey, December
2005
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Views of health care A right or benefit?
Drivers of heath care costs Changing
demographics Illness burden Medical
research Technological advancements Consumer
expectations
Medicaid Benefit Governmental responsibility
EmployerBenefit Private sector responsibility
Unable to afford
Increasing health care costs
Unwilling to support
TURMOIL
?
?
?
?
Cost sharing
Limited benefits
Defined contributions
Dropped coverage
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Health cares Iron Triangle
Quality
Access
Cost
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Current patchwork quilt of Arkansas health
insurance coverage
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Obesity Trends Among U.S. AdultsBRFSS, 1990,
1995, 2005
(BMI ?30, or about 30 lbs overweight for 54
person)
1995
1990
2005
No Data 1519 2024 2529
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Average cost of medical care for adults (55) by
weight
Data source Rhoades JA. Overweight and Obese
Elderly and Near Elderly in the United States,
2002 Estimates for the Noninstitutionalized
Population Age 55 and Older. Statistical Brief
68. February 2005. Agency for Healthcare
Research and Quality, Rockville, MD.
www.meps.ahrq.gov/papers/st68/stat68.pdf.
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Potential savings if Americans had normal weight
(adults, 55)
Underweight 0.96 Billion
Additional medical care costs
Overweight 2.04 Billion
Expected cost of care for those of normal
weight 327.16 Billion
Obese 27.62 Billion
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Who is the CEO of the largest employer-based
health insurance plan in your state?
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Arkansas Public School Employees / State
Employees Health Insurance Plan

• Largest state-based insurance plan ( 120,000
  employees)
• Major state influence in plan design / payment
  structure / network development
• Self-insured plan with traditional benefit
  structure no preventive coverage
• Aging work force with chronic illnesses
• Escalating health insurance premiums
• Lack of risk management strategies (1600 / yr
  for smokers)
• Decisions based on annual actuarial experience
  no long term strategy

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Arkansas Public School Employees / State
Employees Health Insurance Plan

• Charge to the plan
• Incorporate long-term management strategy for
  disease prevention / health promotion
• Three phases undertaken
• 1) Awareness Health Risk Appraisal (2004)
• Tobacco, obesity, physical activity, seat belt
  use, binge drinking
• 2) Support New benefit incorporation (2005)
• first dollar coverage of evidence-based clinical
  preventive services
• Tobacco cessation Rx and counseling
• 3) Engagement Healthy discounts (2006)

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State Employees and Public School Employees
Health Risk Assessment 2006
Tobacco Use (11.4)
3.4
4.4
Physical Activity 1.1
2.4
Obesity BMI 30.0 (34.7)
26.9
11.5
19.6
Self-report Health Risk Assessment Survey -- Fall
2005, n46,637(BMI n46,599) BMI calculated from
self-report height and weight
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Data Driving Policy

• 15 of annual total costs (45.6 million of
  302.8 million) are attributable to having one or
  more of the three risk factors.
• Recognition of state fiscal exposure for future
  risks regardless of state / public school point
  in time job
• Shift in Board management from fiscal actuary
  model to human capital risk management model
• Incorporation of new benefits without return on
  investment strategy
• Tobacco counseling and pharmaceutical coverage
• Three tier obesity benefit
• Nutrition and weight management
• Intensive medical weight loss management
• Surgical gastroplasty at select center of
  excellence

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Arkansas Public School Employees / State
Employees Health Insurance Plan

• Premium discounts (January 2006)
• - 10 per adult/month for HRA completion
• - 10 per adult/month for no-tobacco use
• Premium discounts (January 2007)
• -20 per adult full risk (tobacco, obesity,
  physical inactivity, seat belt use, binge
  drinking)
• ACT 724 (March 2005) up to 3 days leave each
  year for employee participation and point
  accumulation in Healthy Employee Lifestyle
  Program

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Incorporation of State Employee Strategy into
Medicaid New waiver requirements

• Requires implementation of cost-containment
  strategy in general Medicaid population
• Proposal to incorporate HRA / risk-management
  strategy with annual reduction in tobacco use and
  obesity
• Will require integration of State Employee and
  Medicaid strategies
• Opportunity for full integration of public- and
  private-sector programs for optimal population
  health impact

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Arkansas Health Policy Roundtable

• 21 private-citizen members
• 7 Consumer representatives
• 7 Employer representatives
• 7 Insurance / provider representatives
• Rules of engagement
• Open debate by 21 member decision-makers
• Private electronic vote on positions (21)
• Working group of stakeholders
• Provider associations (AMS, AHA, APA)
• State agencies (DOH, DHHS, DOI)
• Healthcare plans (BCBS, Qualchoice, United)
• Consumer interests (State employee union)
• Business interests (Farm Bureau, Chamber)

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Roundtable Strategies for Action (2000)

• Expand Existing Medicaid Program through Tobacco
  Settlement Funds to
• Low income adults 19-64 years old
• Low income pregnant women
• Establish Arkansas Safety Net Partnership
• Act 1044 of 2003 Arkansas General Assembly
• Establish Community-Based Purchasing Pools/Coops
• Act 925 of 2001 Arkansas General Assembly
• Include Scientifically Supported Preventive
  Services
• Promote employer / employee benefit education

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Roundtable Strategies 2000 (continued)

• Achieve Income Tax Neutrality for Health
  Insurance / Health Care Expenditures (Federal)
• Modify Medicare to include Prescription Drugs and
  Expanded Disabled Eligibility (Federal)
• Tie Medical Savings Accounts to Group
  Catastrophic Policies (Federal)
• Increase ARKids enrollment (State)

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Percentage of insured Arkansans by age group
(2004)
Data source ACHI. Arkansas Household Survey of
Health Insurance Status. Little Rock, AR ACHI
2004.
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Sources of health insurance for adult (1964
years) Arkansans (2004)
Data source ACHI. Arkansas Household Survey of
Health Insurance Status. Little Rock, AR ACHI
2004.
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Employment status of uninsured adult (1964 yr)
Arkansans (2004)
Full-time
employed
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Unemployed 39
45
16
Full-time self-
employed
Part-time
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self-
Part-time
employed
employed
4
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Data source ACHI. Arkansas Household Survey of
Health Insurance Status. Little Rock, AR ACHI
2004.
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Percentage of uninsured Arkansans by age group
and gender (2004)
1964 years Uninsured 24
Data source ACHI. Arkansas Household Survey of
Health Insurance Status. Little Rock, AR ACHI
2004.
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Changing Cost Allocations Annual Family Premiums
9,695
3,079
7,309
1,738
6,617
5,571
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Medical Debt Bankruptcy

• 12,000 Average out of pocket medical debt for
  those who filed bankruptcy
• 68 of people who file bankruptcy had health
  insurance
• 50 of all filed bankruptcies are partly the
  result of medical expenses

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Goals of the Roundtable

• Original Goals (2000)
• Evaluate financing challenges facing Arkansans
• Develop a 5-10 year strategic plan with options
• Through incremental reform
• Increase Arkansans covered by health insurance
• Promote marketplace stability
• Revised Goals (2005)
• Prepare for major system reform
• Map opportunities for influence
• Ensure rural states are engaged and influential

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Mapping the next decade

• What is going to happen?
• Demographic shifts
• Economic pressures
• Technological advances
• Cost increases
• Increasing expectations
• What is likely to happen?
• To employer-sponsored healthcare?
• To provider-centered delivery systems?
• To governmental entities responsible?

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The New York Times October 16, 2006
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Science, Politics, and Pragmatism

• Assimilate, generate, transform data into
  information for policymakers
• Anticipate opportunities that are predictable
  (e.g., SCHIP Reauthorization)
• Understand alternative viewpoints
• Invite non-traditional partners to the table
• Embrace change Medicaid / SCHIP have never been
  static policy instruments
• Pursue the goal with objective tenacity

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